What is meant by 'alienation' in the context of mortgages?

Alienation in the context of mortgages specifically refers to the transfer of ownership or interest in a property from one party to another. This is often codified in a clause within a mortgage agreement known as an "alienation clause." Such a clause typically stipulates that if the property is sold or otherwise transferred, the lender has the right to call the entire loan balance due. This means that the lender can demand full repayment upon the sale or transfer of the property, offering a measure of control over the lending situation.

Understanding this is crucial for both buyers and sellers, as it can affect how a property is purchased or sold, particularly if there’s outstanding debt secured against it. The ability to transfer property can influence not just ownership rights but also the marketability of a property.